Fagron Sa Ord

Hello and good morning, everyone. Welcome to Fagron's H1 2025 results webcast. I'm joined today by our CEO, Rafael Padilla, and our CFO, Karin De Jong. Rafael will start by discussing the company's performance and a closer look at the regional development. Karin, well done walking you through the financial results. We will open the floor for questions at the end of the session. With that, I will hand over to Rafael.

Thank you, Ignacio, and good morning all. We're pleased to report strong first half with revenue reaching 476 million. This reflects 11.3% organic growth at constant exchange rates. Growth came from all the regions and segments led by LATAM, BRANZ, North America, and compounding services. Profitability grew by 12.3% to 95 million. and our margin improved to 20% support by operational excellence and synergies from acquisitions. We also continue to execute on our M&A strategy with four new acquisitions completed, Bella Corp in Australia, Unicam and Edge Trade in Serbia, and Active Pharma in the UK. Integration of our earlier acquisitions, including LSP, Pharma Product, Curfers, EuropetSafe, and GINAMA is progressing well and in line with expectations. At SHARE, during our C&D in April, we were evaluating the expansion of Anadil's Vegas facility. We are happy to confirm that the project has now been approved and will be operational during 2028. And to finalize, our guidance for the full year remains unchanged. Meet to high single-digit organic revenue growth at constant exchange rates and slight increase in profitability year-on-year. Karin will provide more details shortly. Let us now look at the regional dynamics. In EMEA, BME performed well and continues to see the benefits of our diversified geographical footprint across the region. Compounding services also delivered solid growth driven by rising demand across both sterile and non-sterile. For the near future, we continue investing in a healthy pipeline of new launches and refinement of our commercial approach to drive further growth. Operational excellence remains a key success factor. In EMEA, this focus translated into better availability and procurement savings, supporting both top-line and margin expansion. Finally, the Dutch FSS expansion project we announced last year is advancing according to plans. Moving into Latin, Brazil remains a standout with continued leadership and a clear growth in the underlying market. In B&E, we are leveraging our global R&D center in Brazil to drive innovation, supporting recent product launches and adoption through targeted prescriber education. Consul Pharma the biggest industry fair in the world, was a huge success again, giving us good visibility for the upcoming period, maintaining good momentum. Like in EMEA, we're making good progress across our operational priorities, which is reflected in both revenue growth and margin supported by higher product availability. To conclude, the Intiplast and Purifarma acquisitions are pending closure. 13 to North America, B&E posted a year-on-year improvement supported by enhanced operations and ongoing drug shortages. We continue to focus on improving our market share as we are clear challengers in this category. Compounding services remain strong, with growth from new customer wins, increased volume from existing clients, and persistent drug shortages. I shared previously GLP-1 related sales concluded in Q2 leading to a more challenging comparison in the second half. During our C&D, we explained that the transition to an existing facility in Tampa is progressing as planned and is expected to be completed later this year. In the meantime, we are operating both the old and new sites in parallel, which has temporarily resulted in double costs. Finally, Our acquisition of Bellacorp in Australia marks our entry into the APAC region. Given its market characteristics, Australian integration will be managed under North America. Let's now say a few words about quality. Quality remains our key differentiator in our industry. With over 35 facilities to audit globally, We are constantly inspected by regulatory bodies across the world to uphold the highest quality standards. During the first half of the year, 16 audits were conducted by regulatory bodies. All of them concluded with minor observations and we received GMP licensed renewals at our Dutch and Czech facilities. Additionally, our internal team has also been working intently and has conducted five global audits. With this dual approach, we enhance our abilities to adapt and stay ahead of evolving regulations. Before moving on, regarding Wichita's warning letter, the status remains the same as it was during our CND in April, where the FDA acknowledged our corrective actions and adequately addresses its requirements pending the site visit. And before Karen takes over on our growth strategy, to support our organic growth, we are announcing an expansion in Azeo's Las Vegas facility to start in Q4 this year. The investment will be $29 million over two years and will give us revenue capacity of $150 million. This will position us to meet the rising demand, boost automation, and uphold the highest standards of quality. An additional leverage from this project is that this expansion will not require individual state pharmacy licenses to operate. Turning to our M&A activities, we're announcing today four more acquisitions showcasing our disciplined serial acquire profit. Starting with Dalla Corp in Australia, with this acquisition, we entered attractive APEC region. Dalla Corp is a supplier of premium quality raw materials and equipment to compounding farms. Additionally, We also entered directly the Serbian market with acquisition of the two leading players, Unicam and Ethitrade. Unicam specializes in the import, sales, marketing, and distribution of pharmaceutical products, while Ethitrade holds licenses for repackaging and relabeling of APIs and XCP. Lastly, we also acquired a market leader in essentials market in this UK, Actifarma. The company specializes on supplying pharmaceutical raw materials and complements our previous acquisition of LSP. With LSP and Actifarma, we have now a solid market position in the UK. And now, Karin will go through the financial highlights for the first half of this year.

Thank you, Rafael, and good morning, everyone. Thank you for joining this call. Let me walk you through the first half of the 2025 financial results and provide more colour, full-year 2025 outlook. In H1 2025, revenues increased by 10.9% on a reported basis to 476.1 billion euros, with North America again delivering the strongest growth of 16%. Organically, at constant exchange rates, the growth was 11.3%, mainly reflecting the weakness in Brazilian AI. Gross margin increased by 140 base points year-on-year, driven by the increasing rate of revenues from North America, which has a higher margin, and procurement savings globally. Our operating expenses increased by 14.1% year-on-year, reflecting strong volume growth in North America and the impact of our recent acquisitions. At a group level, our profitability expanded by 13 basis points year-on-year to 20%. showcasing the benefits of our improved operational capabilities and synergies from acquisitions. We maintain our strong cash-generating capabilities as operating cash flow improved by 25.1% to €52.5 million year-on-year. For the first half of the year, cash conversion is impacted by the phasing of working capital. Lastly, our net debt to Evera Ratio remains stable at 1.5 times, leaving us enough headroom for any potential acquisition. Moving on to the next slide, the bridge illustrates our revenue development for the first half of 2025. EMEA reported a solid 3.8% organic growth at constant exchange rates, while LATAM posted an outstanding 16.1% organic revenue growth at CER, supported by strong performance of Brenton Essentials in Brazil. North America's revenue grew by 15.6% organically at CER, driven by a strong performance in compounding services. Our recent acquisitions contributed €13.1 million to the revenue. ATLIX during the period was a headwind, mainly in LATAM, due to the weakening of the Brazilian AI. On the right side, our P&L shows a 10.9% revenue increase together with our EBITDA before non-recurring results growing 12.3%, which reflects our operating leverage benefits. We see an increase in depreciation and amortization by 16.5% year-on-year, mainly related to the amortization of PVA items of our past acquisitions and investments in North America. Our financial costs increased versus last year, driven by higher interest rates on our debt items due to phasing out of cost hedging instruments in combination with an increased ethics results and more costs. As a result, earnings per share grew by 12.7% to 0.62 euros for the first half of the year. Turning to the next slide, EMEA. In this region, revenue performance was supported by solid organic growth within all segments and M&A. Organic growth in EMEA was supported by geographical diversification in this region, driven better pricing and volume year-on-year, and an improved product availability. Looking at the region's profitability, Revla margin expanded by 60 basis points versus H1 2024. This expansion was achieved thanks to the successful execution of our strategic priorities and operational excellence initiatives. Two acquisitions, namely Euro ETC and Dinama, are the main contributors to EMEA's inorganic growth in the first half of the year. And as Rafa mentioned earlier, we closed the acquisitions of Unichem, SB Trade and Active Pharma in July, and this will contribute to inorganic growth in the second half of the year. For the year, we expect a low single-digit organic revenue growth at CER for EMEA and profitability margin in line with H1 2025. Moving on to LATAM, Sales increased by 1.1% to 86.9 million euro, showcasing strong growth in the brands and essentials, but mostly offset by the FIF impact on a weakening Brazilian AI. Organic growth at CBR was 16.1%, and as mentioned by Rafa earlier, we continue to leverage our innovation strength and launch new products in the market, driving the number of prescriptions and overall volumes. Based on this, we were able to see a nice price and volume dynamics where both were positive year-on-year. In LATAM, we continue focusing on improving our operational capabilities even further. We achieved a 10 basis point webinar margin expansion to 17.4%. We expect a high single-digit to low double-digit revenue growth against CDR for full year 2025. This does imply a normalization of growth rate in the second half of the year compared to H1 2025. mainly as we start to comp off against strong recovery growth rates seen in H2 2024. For EBITDA margin, given the seasonality of this region, H2 is always better than H1 on an annual basis. So we do continue to expect an improvement year on year. Moving on to the next slide, revenues in North America grew by 16% to 212.4 million euros as compounding services maintains its accelerated growth rate while FX represented a small headwind effect. B&E continues to grow at a fast pace, mainly supported by operational improvements in product availability and drug shortages. During H1, we benefited from GLP-1 drug shortages for a total amount of $20 million. Of that, the B&E benefited $5 million. Excluding the revenues from drug shortages, B&E grew by 6%. Compounding services continues to be the growth engine of the region, reporting a solid 16.6% revenue increase year-on-year, or 15.6% organically against constant exchange rates. Trends seen in the past, outsourcing and a high demand for personalized medicine remain and supported the results. During H1, compounding services, and more specifically NSAO help, benefited from GLP-1 shortages. As shared previously, GLP-1 compounding concluded in Q2. This will lead to a more challenging comparison in the second half. Just to remind everybody, in H2 2024, we had $12 million in compounding services and $3 million in the B&E segment. Our operating costs in the region increased year-on-year as we continued to support the volume growth at compounding services and the double cost of NSAO while the transfer to the new facility takes place. The effects from higher operating costs were fully compensated by improvements in operational performance, resulting in a stable revenue margin year-on-year of 19.5%. Going ahead for North America's revenues, we expect a low double-digit percentage of organic growth at CER and an EBITDA margin broadly in line with H1 2025. Turning now to our cash flow, our business model has several strengths, and one of them being strong cash conversion. Operating working capital increased by 150 basis points to 13.8%, reflecting higher inventories to support product availability. The temporary build-up of inventory is a strategic move in LATAM ahead of the biggest industry trade fair, Consumpharma, and improving product availability. Operating cash flow increased by 25.1% to 52.5 million euros. Maintenance CAPEX ended at 3.1% of revenue when excluding one-off projects. Our free cash flow conversion was 39.9% when adjusting for one-off CAPEX slightly below our guidance. However, it should correct towards the end of the year as working capital normalizes. Moving on to the next slide, our net debt evolution for the period. the bridge shows an increase of 50 million euros in our net debt, going from 271 million to 321 million euros. The increase is mainly related to the acquisitions. Nonetheless, our net debt to EBITDA ratio remains stable at 1.5 times, giving us more than enough headroom for any potential acquisitions down the road. And going forward, we will continue our prudent approach and remain below the 2.8 times internal threshold. So before I hand it back to Rafael, let me go through our full year 2025 outlook. We are expecting revenues to be in the mid to high single digit organic growth at CER with different dynamics depending on the region. For EMEA, we expect a low single digit percentage of organic growth at CER with an upside in organically driven by the acquisitions done and announced today. LATAM is expected to end as a high single-digit to low double-digit percentage of organic growth at CDR. And as SAF North America will have tough bumps as we phase out the tailwind of DOP-1 shortages. This will have an impact on growth levels in Q3 and Q4 2025. However, the underlying drivers are strong, and we expect a low double-digit percentage of organic growth at CDR. We also expect our profitability margin to slightly improve year on year. EMEA showed strong results in H1, and we expect this to remain during the course of the year. North America is expected to be broadly in line with H1 level. And lastly, we expect LATAM profitability margin to slightly improve in 2025. Please note that our profitability guidance only considers the acquisitions that are closed. We expect maintenance capital to be at the 3.5% of revenues for 2025, excluding the already announced one of projects and investments. I would now like to hand it back to Rafael for his closing remarks.

Thanks, Karin. To conclude, Fagron is the only global vertically integrated niche defense's high cost generating company operating in the pharmaceutical compounding fragmented market. Our resilient business model is fortified by a diverse geographical footprint. And these factors coupled with demographic trends and our emphasis on personalization are the basis of our success. Our quality focus, together with our ongoing operational excellence initiatives, will optimize our business through global synergies, while the discipline M&A strategy remains a key part of our growth. Sustainability is a paramount priority and a strategic cornerstone for us, as together we create the future of personalizing this. Let's open the floor for questions. Thank you.

Well, thank you very much. And before addressing your questions, please introduce yourselves.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad.

Hello, can you hear me?

Yes, we can. Ah, hello, good morning. This is Frank Klaassen of the Growth Peter Camp. Good morning. Hello, Frank. Two questions, please. First of all, can you elaborate on the situation of the tariffs? Does that have any impact on you? And what do you see in general on the purchasing side of your raw materials, of the APIs? What kind of pricing trends do you see there? That's my first question. And then secondly on Brazil, 16% organic growth, that's nice. Could you elaborate how much is roughly driven by price and how much by volume, and what do you see on the competitive side, competition side in Brazil? Thank you.

Thank you, Frank, and good morning. Regarding tariffs, as you know very well, we're discussing during CMD When you look at our US business, 80% is compounding services, which is, of course, manufacturing in the US. Raw materials account for 10% of the final product value. 20% is V&E. Out of this 20%, so when you take out of the total 100%, of course, 8% is raw materials, APIs. So when we deep dive on this 8% of sales, we have explained many times, and you We remember that you always are very much interested in our operational excellence programs. Our procurement supply comes 60% from Asia, and out of this 60%, you zoom in again and you make Carpaccio, 60% China and the rest India. Having said that, of course, as we also said during the CMD, Andy was explaining that one during the CMD, We see that our suppliers are also sensitive to this situation. So they are working also price reductions at origin. And next to this, we are also having a pricing pass-through policy to our customers, which understand of course perfectly. So, so far we reiterate what we said at CMD, so no material impact for us.

Yeah, and then the second question on the sale price and volume dynamic. So we see in the first half year of 2025 a nice development on both sides. Most of the sales increase, however, is driven by a volume increase and a smaller part is driven by price increases. So we do see that both are positive. The price element also driven partly by the FX movement of the US dollar versus the Brazilian Rai. Overall, very strong performance of

LATAM in the first six months the competitiveness in the environment yes thank you Karin so on that Frank we see as we were saying before that the underlying market is growing so we see that there are more scripts there and this eases the competitive pressure that we saw some years ago Next to this, we have just had the Consul Pharma fair. As you know, it's the biggest one in the world in compounding. There are many compounders coming around the globe, Asia, North America, Europe, Africa. And when we compare when we were there for the first time in 2010, and we compare it now, 15 years later, it's time 10. So you see the fair now with more than 60, 70 companies. showing their products and services to the market, more than 10,000 participants. So therefore, the market, again, is growing, has good prospects, and therefore competition is just together with the fact that we're saying that we are every time more and more innovative, and this gives us also good leverage in the market.

Okay, that's very elaborate. Thank you. Thank you. next one please hello

Hello, can you hear me?

Yes, Matthias.

Yes, hello, good morning, Matthias Mann, and thank you for taking my questions, and congratulations with the results. Maybe two from my end. If I recall correctly, in the guidance previously, you were aiming for more margin expansion in the second half. Is this still the case? And if so, what would be the drivers? And then the second question is maybe on the M&A, can you elaborate a little bit on the deal multiples, the reason of the shareholders to sell, and also the growth profile of these businesses?

Thank you. Yeah, thank you, Mathias. Maybe to start on your guidance question. So maybe firstly to start on the sales guidance. So indeed we reiterate our guidance, mid to high single-digit organic growth against constant exchange rates. Initially we anticipated one quarter of COP1 sales embedded in that guidance. So we see some additional benefits in the second quarter. So overall we move more towards the mid-side of that guidance. If we then look at the profitability guidance, So we increased profitability with 12.3%, an uplift of 13 bps, and in line with EBITDA of full year 2024. So what we expect to see in the second half is an EBITDA margin for North America, which is broadly in line with H1. Same for EMEA, which had a very strong first half of the year. For LATAM, as you know, we have the seasonality impact, H2 versus H1. So H2 usually being stronger than H1. We also expect that. So overall, we do expect a slight step up in EBITDA margin compared to last year, but it will not be as big as the step up that we have seen 2023 versus 2024, which was 50 bids. So that would be on the guidance. Maybe on the acquisitions, I suggest I do the financials. Maybe you can elaborate a bit more on the reasons for selling. So we did a couple of small acquisitions in July and earlier this year we already announced three. So if you look at the four smaller ones, we have one in Australia, Bella, And then we have three in EMEA, which two in Serbia. So if we look at the sales of that, it's a mid to high teams amount of sales, which for Bella was a couple of million. So most of it is allocated to the other, to the EMEA region in this case. The profitability is below group average of that. It's in line with the strategy that we have, that we have a strong synergy case and we expect that we can bring the EBITDA margin of the acquisitions up to group average within 24 months. The multiple is in line with historical multiples that we have, so that's between six and nine, but it's on the low side of this range. And maybe a bit of height on the reasoning.

Yes, for sure, Karin. And good morning, Matthias. So there are mainly two reasons for these four deals, and of course, for the others that we have presented. First one is succession, as we saw with Yurio Tetsuya and Ginnama. And the second one is that entrepreneurs see us as a nice platform to develop their business and help further the customers. So having said that, when you look at the four deals that we have done now, Both Bellacorp and Unicam were our distributors in Australia and in Serbia. So we had a very nice relationship, a long-lasting relationship for many, many years with John Bellacorp and Nenad in Unicam in Serbia. So we have decided to now be directly present in the market. So we're going to focus now, as we do in other countries, in targeted prescriber education and creating more scripts, mainly with our grants. When you look at the SV trade, we are acquiring SV trade now, of course, together now with Unicam. We have a strong presence there also for succession reasons. And then going to active pharma, which is very interesting because now we're going to have production capabilities in the UK, which is nice after Brexit. So Mark is joining us. because we believe that with our platform, active can go to the next level. So now we have together with Farving UK, LSP and Active Pharma, a leading position in the UK market, which is growing and the line growing with the strong personalization and prevention lifestyle trends. Thanks Matis for your questions. Thank you for the answer.

Thank you very much. The next one, please.

I hope I'm audible. This is Usama from the Amro Auto BFF. I just have two small questions. First one with regards to M&A. What is the status of Puri Pharma? And if I look at the cash flow statement, in terms of M&A, how much cash has already been paid out and which

acquisitions are yet to be paid or if in terms of a price proportionality if you can indicate how much is still left to be paid out in h2 so these two questions would be from my part yeah maybe uh usama starting with the cash flow question um so the acquisitions that we announced today um so those are paid in july enterprise value of 13 million one three that's what you will see as a cash out in the second half. If you look at the outstanding liability at the end of June, that was 11.6 million, of which 6.2 million is contingent. So that's expected to be paid over the next two years, depending on the results of the post acquisition. So they're fairly limited amounts. If you look at the two pending ones that are not closed yet, so that are the Brazilian ones, Of course, you have the big one, Beauty Pharma, which has the same status as we mentioned before, so we are waiting the outcome for competition clearance. That's 250 million Brazilian reais, so that will be paid for the most part if we close that, and a part is left behind as a subsequent payment. Same for Intraplus, which is a smaller amount. That is also paid at the moment of closing, which we will, of course, announce separately. So that's what's on that site open.

Thank you. That will be all. Thank you. Thanks, Sam. Thank you, Sam. Next, please.

Your line is now open. Please ask your questions.

Good morning. Yes, good morning. from IMG. Two questions, if I may. I'm sorry if these questions have already been asked. I was late to join the call. The first one is on semi-glutite. Is there any way to play the GLP-1 team in the quarters to come despite the hard stop in semi-glutite sales? due to the FDA but maybe by playing alternatives such as or supplying the industry because from the latest we understand that there's still compounders to supply this product to the market or alternatives. Secondly, on the Australian acquisition, is it correct that it will be recorded under North America? Yeah, those are two questions I have.

Yes, thanks a lot, Stan, for your questions. And both are new, so you didn't miss it before. Regarding semaglutide, as we indicated today in the press release, also when we were explaining the results, we are going or we stopped during Q2, so May 22nd, as you know, we concluded compounding and we follow strictly FDA regulations and framework. So if there was a chance, if FDA regulations and framework would allow, of course, we'd look at the possibilities. At this moment in time, we consider the compound.

Yeah, and maybe on the Australian acquisition, it will be indeed part of the US business. A couple of reasons for that. First, It was a distributor of the Sparkle Inc, some of the brands and essential business in the U.S. So there's a relationship already built in the past years. So that's one. We see similar products in the Australian market as we see in the U.S. market. And we also see big U.S. players active in that market. So the big Medisca PCA that are actively working in that market. So that's the reasoning behind it. It's, of course, for us a nice entrance in the APAC region. So we, as I said, at the Capital Market, they want to enter that region. We see possibilities. It's a small acquisition, but it's a good first small step into that new region. And we hope to continue our acquisition strategy in that region with doing more acquisitions, not only in Australia, but also in the other countries there. So thank you for the question, Stijn.

Thanks, Stijn. Nick? Maybe if I am allowed to follow up on this from memory and correct me if I'm wrong, but I think in the past you already had some Australian business which you, I think, divested to, I think it was IMCD. So what has changed that you now revisit that market?

Yes, sure. That's a very, very good one, Stijn. At that time, Fabriano's trailer was a greenfield operation, and it was relatively small at that time. And when we started leaving from the top position of the company at the end of 2017, we believed that we had to have a narrow focus mainly on the U.S. market, of course, maintaining our strong positions in both Europe and Latin, of course. So that was where the focus was. After that, and after being successful in this North American trajectory, we decided, as Karin was explaining, we also want to enter into the APAC region. mainly out of the four global regions, North, South America, EMEA, so Europe, Middle East, and Africa, the whole bloc, and then APEC is the smallest one. However, we see with the rapidly growing trend, mainly on prevention lifestyle, aging population, of course, personalization. And we have also observed quite closely that Australia offers this opportunity, as Karim said. It's a copy-paste of the US market. You have the same kind of products, formulations, prescriptions, medical bottles, prescribing, compounding. In this segment, of course, we have the two main U.S. competitors, Medisca and PCCA, and we have seen that it's quite profitable for these kind of companies entering that market. So therefore, we had some discussions with John. Bella's owner has been our distributor historically, and we decided, okay, let's go direct, let's go direct together. and let's go towards market leadership, which is a long way to go, because especially Medisca has a strong position there. And therefore, now with this renewed focus, we're going to look at APEC, first of all, with Australia, and then we're looking at other possibilities in other countries. So that's a very good question, Sven. Thank you very much. Okay, thanks very much for the answer.

Thanks. Thank you. We will just wait a moment while the next questioner's line is open. Thank you very much.

Hi, good morning. Can you hear me? This is Eric Wilmer from Kenton speaking.

Yes, Eric, good morning.

Eric, good morning. I've got a few questions and apologies if I've missed these. I also jumped off from another call. I have a specific question on the essential business in North America. There appears to be quite a steep sequential drop between Q2 and Q1. I was wondering if you could highlight it, and again, sorry if I missed. And then in Latin America, organic sales growth implied organic sales for our team to have gone to around 14% in Q2 from 18% in Q1. Is this fully explained by comps, or did this come from a slightly more tense market activity? And then the last question is, I think you already highlighted a bit in relation to your answer to Stan's question, but I was wondering what we should expect from here. Should we first expect a string perhaps of deals in Australia before you enter some of the other markets? And what are the primary other markets in Southeast Asia that you are eyeing? Thank you.

For sure. Thank you for your three questions. And you didn't miss it, Stan, so they are not repeated. For starting with the third one on Australia, you are right. So, first of all, we looked at this market. It is quite similar on the current activities that we are doing in the US. Again, we know the product very well because we have been supplying Bella. We know the formulations. We are now getting in touch with professionals there, medical doctors, big compounders, and we see nice development or future developments, of course, Eric. Of course, it's small, so it has room for growth, and we're going to focus there. We're also looking at other possibilities, and there are interesting countries like Singapore, Malaysia, for example, southern part of China, where we see more and more traction on prevention and lifestyle and healthy aging, DHRT, IVs, treatments. So we are looking into that, and we believe that we can, of course, calm and steady, have new developments there. On the Brazilian growth and regarding competition, as we were saying also at the beginning, we see that, of course, competition in Brazil is the biggest market in volume. It's tough. I mean, it's the toughest market. However, it has eased compared to the past. Also, we need to bear in mind that our strong focus on brands, we have also launched new brands during Console 500 this year, targeted brands. help us for the stickiness factor as you know that very well and also we have been investing a lot in operational excellence firms from our big factory in in brazilian annapolis service brazil and of course our distribution center where we have centralized so we try also from an operational perspective on the central side to be extremely competitive

Yeah, and maybe on the U.S., so what we do see in the first and the second quarter, that is strong on the B&E side, right? So Q1 was extremely strong, but Q2 is also strong. Of course, there's a bit more GLP-1 in the first quarter than in the second quarter, but overall there's no specific reasoning for the decrease because we do believe that Q1 and Q2 both were very strong, and H1 was at 15.7% on the brands and essentials in total in the U.S. So from that side, there's no specific reasoning while Q2 is dropping compared to Q1.

Well understood. Thank you. Thanks, Eric.

Thank you. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad.

Okay, thank you very much for your participation today. I will remain at your disposal should you have further questions. We wish you a great summer. Thank you and goodbye. Thank you all. Thank you.